Meeting the ever-changing needs of the automotive industry

Over the past couple of decades we’ve seen the rise of manufacturers in South East Asia who can replicate certain manufacturing processes and products from Japan at a cheaper cost and with economies of scale. How have Japanese firms been able to remain so competitive in the face of this tough price competition?

The most important thing is to maintain the quality of the product. Of course if it’s too expensive it doesn’t mean anything so we have to focus on efficiency and ‘kaizen’ (constant improvement) to eliminate waste at our plants in order to make quality products at a competitive price. So the price is the result of our efforts at improving efficiency. Emerging countries are very aggressive with their cheaper labor cost and we have to survive against them.

One of the strategies we see being adopted by manufacturers is to automate certain processes and to replace human labor with machines that can work 24/7. How are you leveraging automation technologies to improve your production process?

We've been incorporating automation in our factories within Japan that manufacture cam units and the oilless bearing units. But the purpose is not to automate for automation’s sake alone. We needed to have efficiency in terms of production at lower cost, so we introduced automation within that new framework of improved efficiency and once we’ve established the system in Japan we will spread it throughout our factories globally.

Designing an efficient flow of manufacturing processes is more important than automation per se. Of course we use machining centers to make such complicated metal components, but the important thing is that we’re always thinking about how to improve our tooling, manufacturing and assembling processes in a way that can eventually be rolled out globally.

The components you manufacture are used in a variety of very different environments, for example under water. Traditionally, engineers must design very complex lubrication systems to keep such units working in tough environments. How do you tailor your products to perform in these tough environments?

We call technologies that deal with environments like that ‘special environment fields’, including high temperature environments like incinerators and turbines. Roller bearings are good for lighter duty performance such as in cars whereas sliding metal is for heavier jobs such as special environments in field operations. We currently are studying metal alloys that will be even better suited to severe environments.

Is there a particular project or application that you're particularly proud of having been a part of?

We provide a component that can withstand the heat of a garbage incinerator. Another example is iron manufacturing which is also a high temperature and dusty environment.

One major challenge is to make bearings smaller for certain precise applications, especially in the industrial sector. Can you tell us a bit more about how your company is developing smaller sized bearings?

Making bearings so compact whilst still maintaining their toughness is a real challenge. The strength of our company is that we can create things from scratch. We can create standardized or custom made dies parts from the required materials to produce parts according to demand. For example, if a part will be subjected to severe wear or heavy load, we could respond by coming up with the appropriate material and die parts.

And also we not only manufacture components and bearings for automobiles but we can also manufacture copper alloy for the forming of deep drawing products. Bearing technology doesn’t necessarily need to involve abrasion – there could be a flat surface involved so we can apply our technology to a variety of different parts.

Your company was founded in 1964. Could you run us through your more than 60 years of history and perhaps also run us through some of the key milestones since it was established?

Our company was initially founded by my father who foresaw the need for oilless material emerging in industries such as steel and automotive manufacturing. In the 1970s there was a big automotive manufacturing boom and our products for press dies were introduced to the automotive industry at that time and that has been a driving force for our company ever since.

So the first source of growth for our company was our integration into the automotive industry. First we worked with NISSAN, then TOYOTA and today all the car makers. Before we introduced oilless parts to the automotive industry they used oil and grease for lubrication which made the production plant environment quite difficult to work in. We introduced the use of pressed die and it worked perfectly. We expanded its use from Nissan to all Japanese car makers and then in the 80s we expanded to Michigan in the US and also to Europe.

Mainly driven by government regulations, we are seeing that automotive manufacturers are changing the materials they consume. Heavy metals like steel and iron are on the decline whereas lightweight materials such as aluminum, magnesium, and certain types of resins like CFRP are increasingly being used in cars. How is this material change impacting your business and the press die processes you use?

We have been impacted by the change in materials and we have responded to it by changing the type of press die that we manufacture. At the moment it's difficult to meet the needs of CFRP, but as for steel there's been a move towards making a lighter but stronger high strength type of steel and we have been developing that as well as aluminum of comparable properties.

Of course CFRP, or plastic, is a new material compared to steel. Cost wise, steel is still very important for the body of the car. Some makers have switched to CFRP but it is expensive and suitable mainly for luxury cars. Although the use of CFRP is growing, steel makers are developing new high strength steel which is lighter than ordinary steel but very tough.

So production efficiency wise steel would probably still be the main material used but the situation is liable to change as the bodies of cars need to get lighter and cheaper than they are today.

Can you explain how your company navigated through the coronavirus crisis, and looking at the near future, can you run us through your mid-term strategy and the next steps for Sankyo Oilless?

We have a three year mid-term plan across our global operations in 7 countries, which involves overseeing those local companies overseas which all have totally different backgrounds and have been affected by covid-19 to different extents. Furthermore other changes such as the change of Presidents in the US has changed the nature of the NAFTA treaty so we have to be aware of a lot of things.

Although we only employ around 600 people, we still have to manage those companies in very differing environments so we’ve just completed our third mid-term plan but were not able to achieve our targets so from next January we will start our fourth mid-term plan and by then we hope that covid-19 will have gone and that we’ll be able to concentrate on improving our company’s operations and production system at our head office in Japan before expanding the improvements to the 7 countries overseas in which we operate, both emerging and developed countries.

Since covid-19 I cannot visit overseas subsidiaries so I can only communicate with them via the internet which is not ideal. I hope to be able to get back to visiting them and having the state of emergency lifted.

Can you tell us, looking at the future, what are some of the key markets that you're looking to prioritize as part of your global expansion?

Regarding our international strategy, we would first like to level up our factories and offices. In Japan we have a high market share within the industry, but worldwide we still have much to do so currently our main focus will be where we have our staff but we also want to expand into countries with large populations such as Brazil and India.

Our main line of business would be the automotive and pressed die technologies that we have because we believe that there will be a big demand in booming countries such as India and Brazil and others. However we are mindful that in 10 or 20 years’ time, demand in the automotive industry may slow down due to the changes in panel materials which you mentioned in connection with the rise in electric vehicles.

So we are looking into expanding into other fields also, and that includes the use of our special-use bearing technologies in applications such as incinerators. Currently the areas where there are not well prepared waste disposal facilities are burying their trash in landfills and that's becoming a big environmental soil pollution issue. They are therefore shifting their policy to incinerating the trash so we would like to enter into the incinerator business and other businesses that can make use of our specific high technology bearings.

The demands of customers in the various countries in which you operate can vary widely. How can you tailor your products to suit specific markets that are so different?

Basically, we are not affected by the change in the market because we manufacture and provide press die parts for manufacturing automotive parts themselves. The materials involved may change, but the manufacturing technology itself would not be impacted. So regardless of whether it's an environmentally friendly product or a mass produced car, we can provide the tools to create the parts required.

You have production sites located in various countries. How are you able to ensure that the Sankyo Oilless level of quality is the same whether you manufacture your products here in Japan or in an overseas facility?

The way we implement the Sankyo monozukuri philosophy of production within Japan and also outside of Japan is we have two factories within Japan. One is the Otsuki factory that is located in Yamanashi and the other is the Yamagata factory. The Otsuki factory makes the bush and the plates, whereas Yamagata makes the cam units. In those two factories we have established a quality assurance system which ensures that high quality is maintained through a specific set of regulations that we have established.

So by establishing that system of quality assurance, we can then take that to overseas factories and apply it strictly there to achieve the same level of quality as in the Japanese facilities. With regard to raw materials, if an overseas facility cannot source materials of a high enough quality locally, we will send them materials of the required quality from Japan. It is more expensive if we have to do it that way, and they must first try their best to find appropriate materials locally, but they need our approval before using any specific material and that material must pass our standards for quality controls.

If we were to come back and see you in a few years’ time, what would you like to have accomplished by then, and looking further into the future, what legacy would you like to leave to the next generation of company staff?

We will reach our 60^th anniversary just at the end of our fourth mid-term plan. Beyond that we want to reach our 100^th year anniversary by which time cars and metals may well have disappeared. We hope we can develop the next generation so it can make the company survive until then.